Canada Markets

Rapeseed Reaches a 16-Month Low on the Continuous Chart

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The continuous active Matif rapeseed chart points to a sharp loss of EUR 4.50 on Wednesday to EUR351.50/metric ton, reaching a fresh 2017 low and the lowest point traded since July 2016. The lower study points to the nearby Feb/May spread, which closed unchanged while pointing to continued bearish noncommercial selling. (DTN graphic by Nick Scalise)

Wednesday's trade saw weakness in many global oilseed and vegetable oil markets, including soybeans, soybean oil, palm oil and rapeseed. Canola bucked Wednesday's trend with a narrowly mixed close in 2017/18 crop year contracts.

Perhaps one of the weakest moves was seen in the Matif rapeseed trade. Rapeseed futures fell close to 17-month low this session with a EUR4.50 plunge that saw price push below the 2017 low on the continuous chart and to the lowest level seen since July 2016.

Since reaching the recent Nov. 8 high on the continuous chart of EUR388, the rapeseed price has fallen 9.8% to Wednesday's low of EUR350. To compare with canola, the continuous active canola chart shows a 6% move lower from the November high to this week's Tuesday low.

Only time will tell if the move in rapeseed is nearing an end. Potential retracement support lies nearby at EUR349.59/mt and then again at EUR342.90/mt, which represent the 61.8% and 67% retracement of the move from the July 2014 low to January 2017 high.

The lower study of the attached graphic shows the February/May spread at minus EUR4.25/mt, which has remained unchanged on Wednesday and over the first three days this week. This would suggest that speculative traders, or noncommercial traders, are behind the current selling pressure. The middle study shows stochastic momentum indicators are in oversold territory, although these indicators on the weekly chart are trending lower and nearing oversold territory, pointing to the possibility of further downside ahead.

In other global markets, last week's low on the continuous active Malaysian palm oil chart reached the lowest level since August 2016. Commentary points to rising production and weakening demand boosting stocks in Malaysia to the highest level in almost two years. March soybean oil futures posted a bearish outside day trading bar on Wednesday while is nearing a test of the contract's December low.

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